How to resolve denial code 97?

Denial code CO-97 means the service is bundled into another primary procedure and cannot be reimbursed separately.

To fix a CO-97 denial, follow these steps to review, correct, or appeal the claim. For a complete breakdown of causes and solutions, read the CO-97 Denial Code Guide.

1. Review the Denial Notice

• Check remark codes: Look for accompanying codes (like M15, N19, or N390) on your Explanation of Benefits (EOB) to find the exact bundling reason.
• Confirm group code: Ensure it is a Contractual Obligation (CO) denial, meaning you cannot bill the patient for the adjustment.

2. Check NCCI Edits and Bundling Rules

• Compare procedure codes: Identify the comprehensive code and the component code that triggered the edit.
• Review NCCI tables: Check National Correct Coding Initiative (NCCI) tables to see if the two codes are allowed together on the same date of service.
• Verify modifier indicator: Look for a modifier indicator of "1" or "0" for the code pair. An indicator of "0" means no modifier can ever separate them.

3. Apply a Modifier (If Applicable)

• Use distinct modifiers: If the indicator is "1" and the services were genuinely separate and distinct, add an appropriate modifier (such as Modifier 59 for distinct procedural services or Modifier 79 for unrelated post-operative procedures).
• Avoid misuse: Only add modifiers if clinical documentation truly supports a separate encounter, site, or session.

4. Resubmit or Appeal

• Submit corrected claim: If a valid modifier was missing and applies, update the claim and resubmit to commercial payers (note that Medicare typically requires a redetermination or reopening rather than a standard corrected claim).
• File an appeal: If the payer misapplied an edit and the service was entirely distinct, submit an appeal with medical records and the current NCCI guidelines.
• Write off if correct: If the service is a true bundle under current rules, accept the contractual write-off and update your internal coding practices.

Modifier 97 is a medical billing code appended to CPT procedure codes to indicate that an outpatient therapy service is rehabilitative in nature.

Purpose and Function

• Restores Lost Skills: It identifies services meant to help a patient keep, recover, or improve skills and daily functioning that were lost or impaired due to illness, injury, surgery, or medical trauma.
• Differentiates Care: Insurance plans use it to separate rehabilitative care (restoring prior function) from habilitative care (learning brand-new skills using Modifier 96).
• Common Uses: Applied during post-operative orthopedic recovery, stroke rehabilitation, or physical therapy after a fracture.

Denial code CO 97 paired with remark code M15 means the insurance payer has denied a separately billed service because it is considered an inclusive component of another procedure already paid on the claim.

What the Codes Mean

• CO-97 (Contractual Obligation 97): The benefit for the service is included in the payment or allowance for another service or procedure that has already been adjudicated. Because it is a contractual adjustment, you cannot bill the patient for this denied amount.
• M15 (Remark Code M15): Separately billed services or tests have been bundled because they are considered components of the same procedure, and separate payment is not allowed.

Common Causes

• Unbundling Errors: Submitting separate CPT codes for individual steps or parts of a procedure that should be billed under a single comprehensive code.
• NCCI Edits: Violating National Correct Coding Initiative procedure-to-procedure rules set by the Centers for Medicare & Medicaid Services.
• Missing Modifiers: Failing to include a proper distinct service modifier (such as Modifier 59 or XE/XP/XS/XU) when a secondary service was actually independent and distinct from the primary procedure.

How to Resolve It

1. Review the Claim and EOB: Check the primary procedure code paid on the remittance advice to see what the denied service was bundled into.
2. Verify Coding Rules: Check NCCI tables or Pana Healthcare Solutions guidelines to see if the two codes are permanently bundled or if a modifier allows separate payment.
3. Correct and Resubmit or Appeal: If a modifier was accidentally omitted and the service was genuinely separate, add the correct modifier and resubmit. If the service was truly bundled per guidelines, accept the contractual write-off.

CO-97 paired with Remark Code N19 means the insurance company considers the billed service "incidental" and bundled into the primary procedure, meaning it is not paid separately.

The "CO" stands for Contractual Obligation, meaning the provider absorbs the cost, and the patient cannot be billed. "N19" is an X12 Remittance Advice Remark Code that explicitly states the procedure code was incidental to the primary service (such as routine lab specimen collection during a biopsy).

Why It Happens

• Component Bundling: The service is a standard part of a larger, comprehensive procedure.
• NCCI Edits: National Correct Coding Initiative rules flag the two codes as mutually exclusive or bundled.
• Missing Modifiers: The secondary service was distinct, but a proper procedural modifier (like Modifier 59 or 79) was left off the claim.

How to Resolve It

• Check the Coding: Compare the two codes against NCCI edits or payer guidelines to see if they can ever be billed together.
• Verify Distinct Service: If the secondary service was performed via a separate incision, different organ, or distinct patient encounter, add the correct distinct service modifier and resubmit with supporting medical records.
• Write Off if Correct: If the service is genuinely bundled under the primary code per payer rules, accept the contractual adjustment and close the line item.

The top 5 most common medical billing denial codes are CO-16, CO-18, CO-29, CO-50, and CO-97. These codes are standardized as Claim Adjustment Reason Codes (CARCs).

1. CO-16: Claim Lacks Information

• What it means: The insurance payer needs more data or made a data entry error processing the claim.
• Why it happens: Missing attachments, invalid provider numbers, or blank fields.
• How to fix it: Add the missing information and resubmit the claim.

2. CO-18: Duplicate Claim/Service

• What it means: The payer received identical claims for the same service on the same date.
• Why it happens: Submitting a claim twice before the first one finishes processing.
• How to fix it: Check the claim status before resubmitting, and appeal only if the original was truly lost or denied incorrectly.

3. CO-29: Timely Filing Limit Exceeded

• What it means: The claim arrived past the insurance company's strict deadline.
• Why it happens: Delays in coding, credentialing, or waiting on primary insurance.
• How to fix it: Submit proof of timely filing (like an electronic transmission report) if you sent it on time. Otherwise, write off the charge.

4. CO-50: Not Deemed a Medical Necessity

• What it means: The payer says the diagnosis code does not support the procedure billed.
• Why it happens: Mismatched ICD-10 and CPT codes, or weak clinical documentation.
• How to fix it: Send medical records that prove necessity, or correct the diagnosis code if a more specific one applies.

5. CO-97: Service Bundled in Another Procedure

• What it means: The billed service is part of a larger, comprehensive procedure.
• Why it happens: Biling separate codes for individual steps of a surgery or test that should be billed under one umbrella code.
• How to fix it: Review National Corrective Coding Initiative (NCCI) edits, and add a valid modifier if the service was separate and distinct.